Finance things we don’t like to deal with: estate planning, wills and Power of Attorney

Press the play button below to listen.

Transcription

Interviewer: 96.5 where your family is number one, taking your requests this evening. 1-300-965-965. And we take a bit of break from the requests this evening to talk to the lovely Helen Baker. She’s from On Your Own Two Feet, evening Helen.

Helen: Hi, how are you doing?

Interviewer: Good thanks. Now we’re going hit some of the topics that can sometimes be a bit prickly when we think of finance, most of us bury our head in the sand like an ostrich and don’t like to talk about these things, but these are the things we need to deal with when going forward in planning, isn’t it?

Helen: Yeah, definitely.

Interviewer: Okay, so hit me with the first one, what’s one thing we don’t like to deal with?

Helen: Okay, so the big one is probably the estate planning side of things, which underpins everything you are trying to do. And that’s a terminology that many people go, what is estate planning? But if you think of a will, that is one of the aspects of it, and how many people have done one of those? Not too many people surprisingly. Or they’ve done one but it’s not up to date because they might have had children or they got married, and getting married voids your will so they have to start again and so on.

And then inside the will, one of the keys ones to talk about is guardianship, and that’s always a great topic to have between the parents, because they will usually have different views about who should be the guardian. That’s another one to work out.

Another one to think about is your superannuation, because superannuation is connected to your will, so you can direct your superannuation to somewhere other than where you want things in your will to go, so there’s pros and cons and reasons to do that, so it’s a good one to get advice about. But the big mistake a lot of people make with their super is they leave it to their mum, because most people love their mom and are very grateful.

The downside in almost 99% of cases is mum is not an eligible beneficiary of a superannuation fund. Only four people or four options can be superannuation beneficiaries, and it’s your spouse, your children, a financial dependent or an inter-dependent, so most mums have got a lot of financial dependence issues, probably not eligible, so there’s a little one around there.

And the final bit to look at around there are powers of attorney. There’s two different types. There is an enduring power of attorney and a normal power of attorney and under those powers of attorney, you can also separate that out, someone that might – they might want someone separate for their finance power of attorney as opposed to someone who would be their healthcare power of attorney, so again, need some advice around that.

And the main thing to go and work out is whether or not you should be doing something that’s called a testamentary trust. Because what you might be leaving someone, once tax implications have been taken into consideration could be a lot less than anticipated or what you wanted it to be. So really good idea to go and get advice, make sure you’ve got all your square pegs in square holes, and round pegs in round holes and you’re good to go.

Interviewer: Now there are those things that we bury our head in the sand, so Helen, I will go forth and look at it with my husband and I hope everyone’s just got as much into it as I did this evening. Thank you, lovely.

Helen: You’re very welcome, thanks for having me on the show.

Interviewer: No worries, we will catch up with you again soon. If you want to find out more, make sure you check out OnYourOwnTwoFeet, what’s the website Helen?

Helen: OnYourOwnTwoFeet.com.au.

Interviewer: Brilliant, you take care and thanks for that, we promise we won’t bury our heads in the sand like ostriches anymore.

Helen: Thanks, bye!